“And Lo, My Electricity Bill has Been Reduced Thanks to the RET”

I recently received exciting news that my electricity bill will go down and with my “normal punter” hat on, that feels like a relief after years of massive increases.

In fairness, the regulators have performed a miracle to take the pressure off, given that solar, the carbon tax and the RET were apparently going to cause endlessly increasing electricity price rises and damn us all to eternity according to all and sundry who want those schemes axed. But no, not in NSW. So what gives?

Well interestingly, in April 2014, the NSW Government announced a decision to remove the regulation of retail electricity prices from 1st of July 2014. In their submission to the RET Review they noted that “NSW price deregulation may also lead to additional savings from the RET for customers who were on standard contracts, if retailers’ actual costs in meeting their RET obligations are lower than would have been allowed for in IPART’s pricing determination and there is sufficient competition to ensure cost savings are passed through”

The outcome suggests that what they predicted has come to light – ” and lo, my bill has reduced thanks to the RET”.

Without doubt, Retailers have had it pretty sweet in NSW.

They have been allowed to pass on the full $40 price of REC’s to consumers, whilst buying them at substantially lower prices on the trading market. For years.

They have also been allowed to capture the value of exported solar energy and realize windfall profits by on-selling it t your neighbors. No-one really knows how much this is worth because Retailers aren’t required to report who signs up to (voluntary) solar export tariffs and the Queensland Government liked this idea so much they have just done the same thing. Anecdotal evidence and some quick calculations from installation data of customers on Net billing would suggest its in the order of $5M-$10M p/a.

Now undoubtedly there area whole lot of politics behind this change of electricity price in Australia’s most populous State. But one thing is clear; as modelling tells us over and over and over again, the RET helps to reduce wholesale electricity costs and when the market is forced to pass on those savings in a timely manner (which it previously wasn’t), consumers save money. Because of solar.

And yet at the same time as my electricity bills are going down, 25 Coalition MPs, comprising about half the government backbench in the lower house, have written to Environment Minister Greg Hunt and Industry Minister Ian MacFarlane calling for the RET to be dramatically scaled back. Staggeringly, they have used the excuse that aluminum smelters should be exempt from RET cost imposts (even though they already get exemptions), so they continue to use any old dirty energy they want with utter impunity “because they are very important, we need them for the stability of the grid”.

WTF?

Here we have politicians arguing, threatening us that the very stability of electricity supply in Australia is at risk if we don’t cut the RET?

Give me break!

Our networks can cope with all sorts of stuff; we saw 65% of demand supplied by wind power last week, we see huge spikes in demand with weather events, and these numb nuts are going to try and suggest that a staged write down of demand by aluminium producers can’t be managed? And what about the prospect of them actually buying renewable energy, especially those in Tasmania who have access to the best wind resources in the world or the voluminous hydro energy available?

Narrow minded, short sighted, alarmist, non factual bullshit. Sorry, but in NSW we have clear evidence that electricity prices are falling because of the RET and a massive opportunity to leverage reduced emissions, increased renewable energy, a new energy future and cleaner aluminium and yet, the best that 25 MP’s, our Government, can come up with is “let them pollute, with impunity and no incentive to clean up their act or do anything different”

Laughable.The only reason yourelectricity bill has gone down is because other Australians are paying more for their energy, so that youget to pay less.Please give credit where credit is due.If you really want Australia to have significant amounts of solar power in its energy mix (up from the tiny amount that is in there now), you need start appreciating the sacrifices made by Australians to pay for all that largesse. If you don’t then political blowback is assured and the solar expansion will fizzle long before even a small fraction of Australian power is green. People can deal with being taxed in the service the common good, but not if the people benefitting most from their contribution (people like you) have the gall to pretend there are no such taxes!

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Job001

July 7, 2014 10:30

The confusion seems to be that the grid is not separately owned and accounted. If grid costs were equal for supply and use accounting is simple. Grid costs include operating, maintenance, and line loss total say 12% for some arbitrary grid. Suppliers pay 6% and users pay 6%. Everyone pays for supply and use grid costs, no one is favored or penalized.Germany separates grid from suppliers due to accounting and monopoly issues also, not that Germany is a wonderful model of how to do things, but it is better to deal with it than argue pointless perspective bias and lies, IMO.

Nigel, Your article is misleading. The RET did not lead to your bill going down. The change in regulatory structure allowed your bill to become smaller than if the same regulatory structure had remained in place. This in no way shape or form proves that the RET reduced you bill, only that the policy change reduced the effect of the RET on your bill. In fact, your bill could still be higher than if the RET did not exist, but you would only find this out if the RET was removed and a regulatory structure existed that allowed any possible savings to be passed on to consumers (I’m not advocating for this, but that it would be a much more accurate indicator of the bill impact of the RET). Nate

What’s a RET? Renewbale energy tariff? Nevertheless, the ONLY way humanity will save the biosphere is when people accept the fact that ONLY nuclear and CCS have the potential to do so (at this time). Renewable energy is neat but it definitely can’t “do it all alone”.

Day after day, Month after month, Renewables Fanatics disguised to look like journalists keep pounding out their uneducated, deeply biased, almost embarassingly fraudulent “reporting”.They seldom get called out on most other websites, but they can’t so easily pull the wool over the sharp eyed, above averagely smart, and very well informed readership at TEC.

Nigel is of course right to say that modelling has shown that in some cases, adding wind power can push down “wholesale prices”. However, there is no question that in most cases wind power pushes up the total cost to society. As recent data from the US government EIA says, wind power averages $80/MWh, and the variable cost of the coal and gas-fired electricity it replaces is $30 and $46/MWh repectively*. These variable costs do not cover the fixed cost of thermal plant operation, but of course we need those plants anyway, even if we don’t use them often. * these are averages, so yes, there are places in the central US with cheaper wind power than this, but coal is also cheaper near the coal mines, so the conclusion still holds.

For those who asked, RET is Australia’s Renewable Energy Target, similar to renewable portfolio standards in the US.Meanwhile, as others have noted, this article is incredibly misleading.The author himself admits that for years his electricity bill has been skyrocketing, and it is quite likely that the RET was responsible for at least part of that. Utilities had to estimate the actual cost of implementing the RET (which is substantial) and they raised their rates in anticipation of that. As it turned out, the actual RET costs were a bit less than expected, so this year his bill goes down.But if Nigel had the guts and honesty to compare his current electric bill to the bill he got in 2000, before the RET was implemented, he might have written a completely different story.Or maybe not.